In its report and accounts for the year ending 31 December 2017, the Wirral-based company revealed it had suffered from complications arising from three fixed-term contracts, despite a sales increase of 7.8% to £37.8m.
Sun Valley said the year had been challenging, with margins down 16% in what it described as a very competitive snacks and nut market.
The ongoing impact of the three fixed-term contracts had now been substantially addressed, the manufacturer added.
Initial set-up problems
However, initial set-up problems surrounding the investment in an enterprise resource planning system caused operating issues for Sun Valley, which negatively affected closing stock for 2016.
A statement provided with the results also mentioned the impact of a fire towards the end of the year.
“Luckily, no-one was injured and the damage was restricted to one area of the plant,” said the company. “Through the notable efforts of our staff, alternative arrangements were quickly made and no customers suffered any loss of supply.”
‘Flexible processing capacity’
Commenting on the future of the business, Sun Valley said: “As part of the strategic plan driven by our new chief executive, a programme of reinvestment in new, more efficient and flexible processing capacity has commenced. As noted, the first item was in the packing facility.”
Funding for the packing facility, as well as any future investment, would be financed by a new line of credit provided to Sun Valley by HSBC.
“Against the background of this difficult trading year, we have increased our active customer base and achieved growth in our own Sun Valley-branded product range,” the manufacturer added.
Meanwhile, KP Snacks aims to create 20 jobs as it pumps £6m into a new pellet production facility at its Billingham factory in Teesside. The news heads Food Manufacture’s latest Editor’s Spotlight newsletter, which is published every Tuesday and Thursday and highlights hot topics in the food and drink manufacturing sector.